“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
Investors can learn a lot from Warren Buffett, whose above quote teaches the importance of thinking about investment time horizon, and asking ourselves before buying any given stock: can we envision holding onto it for years — even a twodecade holding period possibly?
Suppose a “buyandhold” investor was considering an investment into NVIDIA Corp (NASD: NVDA) back in 2003: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full twodecade investment time horizon and then actually held for these past 20 years, here’s how that investment would have turned out.
Start date:  12/22/2003 


End date:  12/20/2023  
Start price/share:  $1.76  
End price/share:  $481.11  
Starting shares:  5,681.82  
Ending shares:  6,193.20  
Dividends reinvested/share:  $1.50  
Total return:  29,696.09%  
Average annual return:  32.94%  
Starting investment:  $10,000.00  
Ending investment:  $2,979,407.02 
The above analysis shows the twodecade investment result worked out exceptionally well, with an annualized rate of return of 32.94%. This would have turned a $10K investment made 20 years ago into $2,979,407.02 today (as of 12/20/2023). On a total return basis, that’s a result of 29,696.09% (something to think about: how might NVDA shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that NVIDIA Corp paid investors a total of $1.50/share in dividends over the 20 holding period, marking a second component of the total return beyond share price change alone. Much like watering a tree, reinvesting dividends can help an investment to grow over time — for the above calculations we assume dividend reinvestment (and for this exercise the closing price on exdate is used for the reinvestment of a given dividend).
Based upon the most recent annualized dividend rate of .16/share, we calculate that NVDA has a current yield of approximately 0.03%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .16 against the original $1.76/share purchase price. This works out to a yield on cost of 1.70%.
One more investment quote to leave you with:
“The best stock to buy is the one you already own.” — Peter Lynch